The incentives still exist, said David Friedman, senior director for federal policy at Rewiring America, a nonprofit focused on electrification. There are two main categories: tax credits, which get counted against your tax liability at tax time, and rebates, which can reduce up-front costs. The rebates, which the IRA stipulated had to be administered via state governments, "were a little more up in the air" for a bit, Friedman said. Only 10 states plus the District of Columbia had their programs up and running when Trump took office, and two of those paused them when the Energy Department suddenly froze the funds needed to reimburse states for the rebates. Now that the payment portal has reopened, The Washington Post recently reported, "some states, including California, New York, Maine and New Mexico, are continuing their rebate programs." Even if you live outside one of those states, the federal tax credits never went away. "It’s going to take an act of Congress to change that," Friedman said. And even if Congress were to repeal this particular part of the IRA, "it’s pretty rare and honestly would be pretty painful to take away a tax credit in the middle of the year.… Typically when changes are made to tax law, it’s going forward, not present or going back." If Congress were to repeal these, they’d probably just end them ahead of schedule—maybe by a few years, he said, or maybe in 2026, rather than cutting them midyear. Tax credits don’t offer the instant affordability perks of rebates, of course. In the case of a new electrical panel or a heat pump water heater, the rebates could offer lower-income households $4,000 and $1,750, respectively, off the cost of the new devices, whereas the federal tax credit for a panel upgrade offers only 30 percent of the project cost, for a maximum of $600. Rebates "help people who can least afford the skyrocketing energy prices people are facing today," Friedman explained. "They’re targeted at low-and moderate-income households. These are folks who are much more likely to put a Band-Aid, effectively, on their hot water heater or their heating and cooling system because they can’t afford to repair it, and that traps them in an expensive cycle. It sticks them with an outdated unit that costs more to operate and so they have higher utility bills." In theory, the rebate programs are set to expand, because every state except for South Dakota applied to participate in the program, Friedman said. Even states that don’t yet have their programs up and running have "got contracts with the money that is legally obligated to them." Contracts, of course, have not exactly deterred the Trump administration so far in its quest to freeze funds—despite a barrage of unfavorable judicial rulings. A growing number of advocates for these home energy incentives, though, are arguing that axing them would also be bad politics. "I think that one thing that’s become evident in the last year or so is that household energy costs—inflation, fossil fuel prices—those do seem to be more top of mind for Americans," Energy Innovation senior director Robbie Orvis recently told Heatmap’s Matthew Zeitlin, in a piece about the "dollars-and-cents arguments" for keeping the IRA. Heatmap Pro’s own opinion modeling, Zeitlin noted, backed that up, showing that "lower utility bills is the number one perceived benefit of renewables in much of the country." "A package of heat pump, water heater, heat pump heating-cooling system, and some good insulation and windows is going to save you nearly a thousand dollars a year," Friedman said. Getting rid of the incentives that make that more affordable for people, he said, "would be a tax hike on the American public. And at a time when you’ve got a president who’s promised to cut people’s energy bills in half, it would cripple their ability to fight high energy prices." That’s in addition to Trump’s tariff policies possibly raising utility bills all on their own. When analysts point out that IRA funds have particularly benefited red districts, they’re typically referring to money that has gone into manufacturing. But the home energy incentives could particularly benefit Republicans too. Homeowners are both more likely to lean GOP than Democrat and about twice as likely to self-identify as "strongly Republican" than renters are. Whether either the manufacturing benefits or the utility-bill benefits to their constituents convince the GOP to spare the IRA remains to be seen. After all, lots of groups lean much further right than homeowners do; that hasn’t stopped Trump from pursuing policies that wreak havoc on their bottom lines. |
